China’s National Council for Social Security Fund (NCSSF) has signed contracts with seven provincial and municipal governments to manage a portion of the money from their pension funds, reports Caixin.

The local governments, which include Beijing and Shanghai, entrusted a total of 360 billion yuan (US$52.1 billion) to be managed by NCSSF, of which 137 billion has already been invested.

While China’s rapidly aging population threatens the sustainability of the pension system, local governments have been restricted from investing in equity markets or corporate bonds. The average rate of return for state pension funds from 2004 to 2014 was only 2%, below the 2.2% rate of inflation. Over the same period the National Social Security Fund’s strategic reserve recorded a 15% return on investment.